This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Explaining the background to the review Dr Fox said that over the last six months he has had to help produce a thorough, cross-government Strategic Defence and Security Review:

• after 12 years without a fundamental rethink;
• in the midst of the biggest financial crisis in a generation;
• with an inherited Defence Budget in overdraft to the tune of some £38bn;
• without undermining seriously capabilities, the military covenant or UK industrial capacity; and
• at a time when our Armed Forces are fighting at a high tempo in Afghanistan.

Dr Fox said:

And of course this review comes against a backdrop where the wider risks to our interests and way of life are growing.

In the UK, with the difficulties we have at home, there is a danger of becoming more introverted - particularly when it comes to recognising the dangers that are growing outside our relatively safe Euro-Atlantic bubble.

This is not just a problem in the UK. Across Europe we tend to see the world through this lens. The world maps on the walls of European capitals place the Greenwich Meridian at the centre - technically correct, but often betraying a very Eurocentric view of the world.

Dr Fox said in future we must take a wider, more global view of the world, for example:

• nuclear proliferation - North Korea, Iran and the regional implications of their drive for nuclear weapons;
• a Middle East peace process under constant pressure with the ever present risk of escalation;
• the risk of the return of civil war in Afghanistan creating a security vacuum and risking the destabilisation of Pakistan with potentially unthinkable regional consequences;
• Al-Qaeda affiliates springing up in Yemen and Somalia with continued significant terrorist activity wherever there are failing states or weak government; and
• the opening up of new contested regions, such as the High North, due to climate change - and new contested domains without geographic barriers such as cyberspace due to advances in technology and our dependence on them.

He said that is why the National Security Council agreed the adaptive posture and that this was the force driver of the SDSR and is the basis upon which the Armed Forces will be configured in the coming years.

Dr Fox said that this posture demands that our Armed Forces become a more flexible and agile force with global reach:

• capable of providing nuclear and conventional deterrence, containment, coercion and intervention;
• investing in new technology and capabilities more suited to the likely character of future conflict, such as cyber security;
• divesting ourselves of capabilities that have less utility in the post-Cold War world; and
• with the ability to regenerate quickly capabilities that are not needed now if threats change.

He added:

This is what I believe we have achieved in the Defence settlement as part of the SDSR - meeting twin priorities of protecting front line capability for Afghanistan and beginning the process of transforming our Armed Forces to meet the challenges of the future; setting the path to a coherent and affordable defence capability in 2020 and beyond.

Achieving this in the circumstances we inherited means smaller Amed Forces, some painful decisions, and a degree of sacrifice. For instance, politically it would have been easier to support the requirement for carrier strike in the future by maintaining the Harrier force. But the military advice was to do what was politically more difficult - to maintain Tornado.

If I had a clean sheet of paper, unencumbered by existing contractual or operational commitments, and without the financial pressures facing all government departments, the results would undoubtedly have been different.

But just as I’m a hawk on Defence, I am a hawk on deficit reduction too. And I always take consolation from the fact that hawks have a far greater life expectancy than doves.

I didn’t come into politics to make defence cuts. But there can be no security without a strong economy. Tackling the deficit and bringing the Defence Budget back into balance is a vital part of how we protect this country’s national security into the future.

And because of the priority we place on security, the Defence Budget is making a more modest contribution to deficit reduction relative to almost all other departments.

Dr Fox said that the SDSR is a point of departure, not the end of the line, and that a path has been set to 2020 and beyond, with regular reviews every five years. He added:

The reality is that implementation of what we have set out will be no easy ride, there remain hard decisions to take, and there is no new money. So if the penny has yet to drop, let it drop now.

Dr Fox said that of course the choices that have been made will result in changes to our equipment and support requirements and therefore what the MOD will be buying from industry in future:

In some cases, where particular programmes will be stopped altogether, there will sadly be job losses,” he said. “And just as with the reductions in manpower in the Armed Forces and civilians in the MOD, these are a matter of regret.

The industrial implications of the key SDSR choices were given careful consideration. We will now undertake an extensive programme of commercial negotiations with our suppliers in the coming months, as part of the SDSR implementation process.

This will focus on the areas where there have been the most significant changes, but is expected to involve all of the MOD’s key suppliers.

Speaking about industry Dr Fox said:

Having strong and viable industry in the UK is a formidable strategic asset and a key part of our international security relationships. Successful industry provides jobs, maintains skills and makes a considerable contribution to the exchequer.

The defence industry actually makes and sells things abroad at a time when the Government wants growth and export-led recovery and a rebalancing of the economy.

It helps drive technological innovation which gives our Armed Forces their cutting edge and can benefit society as a whole as the same innovation is applied more widely.

Over the next few weeks my ministerial team will be engaging with you to get the best from both Government and industry in support of Defence.

Next week Peter Luff will be launching a wide-ranging discussion with industry and others to provide a more measured, strategic consideration of UK Defence industrial needs and broader economic competitiveness. This will mark the beginning of the formulation of a comprehensive defence industrial and technology policy.

At the UKTI DSO [UK Trade & Investment Defence and Security Organisation] Symposium Gerald Howarth will be updating you on our plans for greater export support. And, under the umbrella of the Defence Reform Unit, led by Lord Levene, we will continue to build on the work of the acquisition reform programme to drive through further reform to the acquisition process.

Dr Fox concluded by saying:

I do not need to tell you the scale of the economic difficulties we face or the challenges that lie ahead. But I also know how passionate and committed you all are to the defence of our nation, to supporting our Armed Forces and their families, and to making sure they have all they need to keep the country safe.

We are in a process of transformation towards a more balanced and stronger economy where industry will play a major role. While we cannot provide certainty in Defence in an unstable world, we can provide better management of unpredictability to enable better management and investment planning for both the military and industry.

As difficult as it has been over the last few years, and as difficult as it will remain, I believe that the SDSR has set our Armed Forces on a path towards a sustainable future - in tune with the foreign policy requirements of the country and meeting the needs of national security.

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